Public accounting represents accounting services offered to clients from small or large firms. Common services offered include tax, auditing, general accounting, and consulting services. Accounting firms may offer other services to their clients based on their needs. Most accountants working under the public accounting umbrella have a professional license, such as the Certified Public Accountant (CPA) certification. This is a universal, worldwide license that indicates an accountant has gone through a rigorous test in order to achieve this standard.
Tax services from the public accounting industry typically include the preparation of annual personal or corporate returns. CPAs in this field spend copious time learning and staying abreast of current tax law. This often involves attending seminars or other training to ensure they offer the best services possible. Tax planning offered throughout the year allows tax accountants to help companies find ways to lower their tax liabilities. Targeted tax planning may also be necessary when a company makes a major move or decision regarding its operations, such as spinning off a division.
Auditing is perhaps the most well-known public accounting service. Accounting firms will offer to come in and test a client’s accounting books for accuracy, validity, and timeliness. Publicly held companies typically need to undergo audits in order to meet government reporting guidelines. Audits involve planning and field tests to determine the scope of a client audit. After the review, the firm will release an official opinion that contains the auditor’s opinion of the company’s financial reporting.
General accounting services offered by public accounting firms basically allow a company to outsource its financial reporting. A client will pay for professional accountants to maintain its general ledger and prepare financial statements. The client will simply forward all financial information to the accounting firm and allow the accountants to prepare it. This services works well for small companies or those unable to spend the appropriate amount of time completing accounting processes.
Consulting services are typically wide-ranging in public accounting. Professional accountants can consult with clients on a number of issues, from tax and mergers to purchases and general accounting and even employee benefit plans. Under current laws and standards, accounting firms are often unable to offer consulting services to a client in addition to auditing or general accounting services. This blurs the line between the segregation of duties. A firm that offers specific tax advice may be unable to prepare accounting information as they complete too many services for their client.